================================================================================

                                  FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

(Mark one)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934.

For the quarterly period ended March 31, 1999

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE  SECURITIES
     EXCHANGE ACT OF 1934.

For the transition period from _________to_________

Commission file number 001-14093

                              Young & Rubicam Inc.
                              --------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                     13-1493710
          --------                                     ----------
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                     Identification No.)

285 Madison Avenue, New York, New York                    10017
--------------------------------------                    -----
(Address of principal executive offices)                (Zip Code)

                                 (212) 210-3000
                                 --------------
              (Registrant's telephone number, including area code)

Indicate by checkmark whether the registrant: (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.    Yes [X].         No [ ].


The number of shares  outstanding of the  Registrant's  Common Stock,  $0.01 par
value, as of May 3, 1999 was 65,745,672.

<PAGE>


                  YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES

                                    FORM 10-Q

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

<S>
PART I:    FINANCIAL INFORMATION

   Item 1.        Financial Statements

                                                                                     PAGE NO.
                                                                                     --------
                                                                                      <C>
                  Consolidated Balance Sheets as of
                  March 31, 1999 and December 31, 1998                                  2

                  Consolidated Statements of Operations for the
                  Three Months Ended March 31, 1999 and 1998                            3

                  Consolidated Statements of Cash Flows for the
                  Three Months Ended March 31, 1999 and 1998                            4

                  Notes to Consolidated Financial Statements                        5 - 6

   Item 2.        Management's Discussion and Analysis of Financial
                  Condition and Results of Operations                               7 - 10

PART II:    OTHER INFORMATION

   Item 6.        Exhibits and Reports on Form 8-K                                  11

SIGNATURES

EXHIBIT INDEX

</TABLE>

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This  document,  information  included in future filings by Young & Rubicam Inc.
("Y&R") with the United States  Securities and Exchange  Commission (the "SEC"),
and  information  contained  in  written  materials,  press  releases  and  oral
statements  issued by or on behalf of Y&R contain,  or may  contain,  statements
that constitute  "forward-looking  statements" within the meaning of Section 27A
of the  Securities  Act of 1933, as amended,  and Section 21E of the  Securities
Exchange Act of 1934, as amended.  These statements include statements regarding
the intent,  belief or current  expectations  of Y&R or its officers  (including
statements preceded by, followed by or that include forward-looking  terminology
such  as  "may,"  "will,"  "should,"   "believes,"   "expects,"   "anticipates,"
"estimates,"  "continues"  or similar  expressions  or  comparable  terminology,
including  the  negative  thereof)  with  respect  to  various  matters.   These
forward-looking  statements include  statements in the "Management's  Discussion
and Analysis of Financial  Condition and Results of Operations"  section of this
document  relating  to Y&R's  performance.  It is  important  to note that Y&R's
actual  results  could  differ   materially  from  those  anticipated  in  these
forward-looking  statements  depending on, among other  important  factors,  (i)
revenues  received  from  clients,  including  revenues  pursuant  to  incentive
compensation  arrangements entered into by Y&R with certain clients,  (ii) gains
or losses of clients and client business and projects, as well as changes in the
marketing  and  communications  budgets of clients,  (iii) the overall  level of
economic  activity in the principal  markets in which Y&R conducts  business and
other trends affecting Y&R's financial condition or results of operations,  (iv)
the impact of  competition  in the marketing and  communications  industry,  (v)
Y&R's liquidity and financing plans and (vi) risks associated with Y&R's efforts
to comply with Year 2000 requirements.  All  forward-looking  statements in this
document  are  based on  information  available  to Y&R on the date  hereof.  In
addition,  the  matters  set forth  under the  caption  "Risk  Factors" in Y&R's
Preliminary  Prospectus dated May 6, 1999 included in the Registration Statement
on Form S-1  (File  No.  333-77235)  filed by Y&R with the SEC  pursuant  to the
Securities Act of 1933, as amended, constitute cautionary statements identifying
important  factors with respect to such  forward-looking  statements,  including
certain  risks and  uncertainties  that  could  cause  actual  results to differ
materially from those in such forward-looking statements.


<PAGE>


PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

                 YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                              MARCH 31,   DECEMBER 31,
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)                                               1999         1998
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                                        <C>          <C>     
CURRENT ASSETS
   Cash and cash equivalents                                                               $ 63,209     $122,138
   Accounts receivable, net of allowance for doubtful accounts of
      $18,485 and $17,938 at March 31, 1999 and December 31, 
      1998, respectively                                                                    866,609      835,284
   Costs billable to clients                                                                 63,874       55,187
   Other receivables                                                                         46,693       37,177
   Deferred income taxes                                                                     46,831       46,803
   Prepaid expenses and other assets                                                         34,839       25,979
                                                                                       --------------------------
        Total Current Assets                                                              1,122,055    1,122,568
                                                                                       --------------------------
NONCURRENT ASSETS
   Property and equipment, net                                                              148,488      150,413
   Deferred income taxes                                                                    150,231      158,646
   Goodwill, less accumulated amortization of $76,959 and $84,292
    at March 31, 1999 and December 31, 1998, respectively                                   123,302      120,075
   Equity in net assets of and advances to unconsolidated companies                          36,630       38,397
   Other assets                                                                              41,919       45,156
                                                                                       --------------------------
        Total Noncurrent Assets                                                             500,570      512,687
                                                                                       ==========================
        Total Assets                                                                    $ 1,622,625   $1,635,255
                                                                                       ==========================
CURRENT LIABILITIES
   Loans payable                                                                        $    52,699   $   31,365
   Accounts payable                                                                         931,378    1,008,624
   Accrued expenses and other liabilities                                                   184,487      203,099
   Accrued payroll and bonuses                                                               50,370       77,078
   Income taxes payable                                                                      19,783       19,290
                                                                                       --------------------------
        Total Current Liabilities                                                         1,238,717    1,339,456
                                                                                       --------------------------
NONCURRENT LIABILITIES
   Loans payable                                                                            151,338       31,494
   Deferred compensation                                                                     31,353       30,635
   Other liabilities                                                                        110,838      114,128
                                                                                        --------------------------
        Total Noncurrent Liabilities                                                        293,529      176,257
                                                                                        --------------------------
Commitments and Contingencies
Minority Interest                                                                             4,028        4,573
                                                                                        --------------------------
STOCKHOLDERS' EQUITY
   Money Market Preferred Stock - cumulative variable dividend; liquidating value of $115
    per share; one-tenth of one vote per share; authorized - 50,000 shares; issued and               
    outstanding - 87 shares                                                                       -            -
   Cumulative Participating Junior Preferred Stock - minimum $1.00 dividend; liquidating
    value of $1.00 per share; 100 votes per share; authorized - 2,500,000 shares; issued           
    and outstanding - 0 shares                                                                    -            -
   Common stock, par value $.01 per share; authorized - 250,000,000 shares; issued and
    outstanding - 65,886,003 shares and 66,374,569 shares at March 31, 1999 and December
    31, 1998, respectively (excluding 4,322,392 shares and 3,976,941 shares in treasury)        702          704
   Capital surplus                                                                          926,840      934,676
   Accumulated deficit                                                                     (738,592)    (758,292)
   Cumulative translation adjustment                                                        (18,024)     (10,810)
   Pension liability adjustment                                                              (1,738)      (1,738)
                                                                                        --------------------------
                                                                                            169,188      164,540
   Common stock in treasury, at cost                                                        (82,837)     (49,571)
                                                                                        --------------------------
        Total Stockholders' Equity                                                           86,351      114,969
                                                                                        ==========================
        Total Liabilities and Stockholders' Equity                                      $ 1,622,625  $ 1,635,255
                                                                                        ==========================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       2

<PAGE>



                 YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT SHARE AND
  PER SHARE AMOUNTS)                                                     THREE MONTHS ENDED MARCH 31,
                                                                      -----------------------------------
                                                                           1999                 1998
---------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                   <C>        
Revenues                                                             $   383,873           $   348,173

Compensation expense, including employee benefits                        235,018               213,598
General and administrative expenses                                      114,297               109,242
                                                                      -----------------------------------
Operating expenses                                                       349,315               322,840
                                                                      -----------------------------------
Income from operations                                                    34,558                25,333
Interest expense, net                                                     (1,646)               (5,575)
Other income                                                                   -                   827
                                                                      -----------------------------------
Income before income taxes                                                32,912                20,585
Income tax provision                                                      13,494                 8,852
                                                                      -----------------------------------
                                                                          19,418                11,733
Equity in net (loss) income of unconsolidated companies                      (16)                  115
Minority interest in net loss of consolidated subsidiaries                   299                   342
                                                                      -----------------------------------
Net income                                                            $   19,701           $    12,190
                                                                      ===================================
Earnings per share:
  Basic                                                               $     0.30           $      0.24
                                                                      ===================================
  Diluted                                                             $     0.24           $      0.19
                                                                      ===================================
Weighted average shares outstanding (Note 3):
  Basic                                                               66,324,420            50,762,144
                                                                      ===================================
  Diluted                                                             81,892,192            64,453,134
                                                                      ===================================
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       3


<PAGE>



                  YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                      THREE MONTHS ENDED MARCH 31,
                                                                                     -------------------------------
(IN THOUSANDS)                                                                            1999            1998
--------------------------------------------------------------------------------------------------------------------
<S>                                                                                      <C>            <C>      
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                                             $  19,701      $  12,190
Adjustments to reconcile net income to net cash provided by operating activities:
  Depreciation and amortization                                                             15,769         14,180
  Deferred income tax expense                                                                8,280          3,777
  Equity in net loss (income)  of unconsolidated companies                                      16           (115)
  Dividends from unconsolidated companies                                                      905            252
  Minority interest in net loss of consolidated subsidiaries                                  (299)          (342)
Change in assets and liabilities, excluding effects from acquisitions,
  dispositions and foreign exchange:
  Accounts receivable                                                                      (29,034)       (22,261)
  Costs billable to clients                                                                 (9,306)       (21,508)
  Other receivables                                                                         (9,527)        (5,031)
  Prepaid expenses and other assets                                                         (5,895)        (1,163)
  Accounts payable                                                                         (69,759)       (43,672)
  Accrued expenses and other liabilities                                                   (18,868)       (34,377)
  Accrued payroll and bonuses                                                              (26,616)       (16,556)
  Income taxes payable                                                                       1,167         (5,007)
  Deferred compensation                                                                        355          1,478
  Other                                                                                     (1,359)        (4,021)
                                                                                      -------------------------------
Net cash used in operating activities                                                    $(124,470)     $(122,176)
                                                                                      -------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and equipment                                                    $ (14,788)     $  (7,889)
  Acquisitions, net of cash acquired                                                        (8,669)             -
  Investment in net assets of and advances to unconsolidated companies                      (1,912)        (1,030)
  Proceeds from notes receivable                                                               322            339
                                                                                     -------------------------------
Net cash used in investing activities                                                    $ (25,047)     $  (8,580)
                                                                                     -------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from loans payable, net                                                         131,772         24,972
  Common stock issued                                                                        1,134          1,287
  Common stock repurchased                                                                 (42,403)             -
  Payments of deferred compensation                                                              -         (1,190)
  Payment of installment notes, net                                                              -         (2,100)
  Other financing activities                                                                   (59)          (277)
                                                                                     -------------------------------
Net cash provided by financing activities                                                $  90,444      $  22,692
                                                                                     -------------------------------
Effect of exchange rate changes on cash and cash equivalents                                   144         (1,234)
Net decrease in cash and cash equivalents                                                  (58,929)      (109,298)
Cash and cash equivalents, beginning of period                                             122,138        160,263
                                                                                     ===============================
Cash and cash equivalents, end of period                                                 $  63,209      $  50,965
                                                                                     ===============================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid                                                                            $   2,939      $   9,157
                                                                                     ===============================
Income taxes paid                                                                        $   4,960      $   9,237
                                                                                     ===============================
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       4

<PAGE>



                 YOUNG & RUBICAM INC. AND SUBSIDIARY COMPANIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - OPERATIONS AND BASIS OF PRESENTATION:

NATURE OF OPERATIONS: Young & Rubicam Inc. (the "Company") is a global marketing
and   communications   enterprise  with  integrated   services  in  advertising,
perception  management and public relations,  branding  consultation and design,
sales  promotion,  direct marketing and healthcare  communications.  The Company
operates  in  the  United  States,   Canada,   Europe,  Latin  America  and  the
Asia/Pacific  region as well as through  certain  affiliations in other parts of
the world.

BASIS  OF  PRESENTATION:   The  accompanying  unaudited  consolidated  financial
statements  of the  Company  have  been  prepared  pursuant  to the rules of the
Securities and Exchange Commission. Certain information and footnote disclosures
normally included in financial  statements prepared in accordance with generally
accepted  accounting  principles have been condensed or omitted pursuant to such
rules and regulations. These consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 1998. In the opinion of management,  the accompanying  financial  statements
reflect all adjustments, which are of a normal recurring nature, necessary for a
fair   presentation   of  the  results  for  the  periods   presented.   Certain
reclassifications  have been made to the prior years'  financial  statements  to
conform to the 1999 presentation.

The results of operations for the interim periods  presented are not necessarily
indicative of the results expected for the full year.

NOTE 2 - USE OF ESTIMATES:

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

NOTE 3 - EARNINGS PER COMMON SHARE:

Basic net  earnings  per  share is  calculated  by  dividing  net  income by the
weighted  average  shares of common  stock  outstanding  during the three months
ended March 31, 1999 and 1998.  Diluted earnings per share reflects the dilutive
effect of stock  options,  primarily  stock options  granted to employees  under
stock-based  compensation  plans.  Shares  used in  computing  basic and diluted
earnings per share were as follows:

                                         THREE MONTHS ENDED MARCH 31,
                                             1999             1998
--------------------------------------------------------------------

Basic - weighted average shares           66,324,420   50,762,144
Dilutive effect of stock options          15,567,772   13,690,990
--------------------------------------------------------------------
Diluted - weighted average shares         81,892,192   64,453,134
====================================================================


                                       5

<PAGE>



NOTE 4 - COMPREHENSIVE INCOME

The following table sets forth total comprehensive income and its components:

                                                THREE MONTHS ENDED MARCH 31,
(IN THOUSANDS)                                       1999         1998
---------------------------------------------------------------------------
Net income                                          19,701     12,190
Foreign currency translation adjustments            (7,214)    (2,054)
---------------------------------------------------------------------------
Total comprehensive income                          12,487     10,136
===========================================================================


NOTE 5 - SUBSEQUENT EVENTS

ACQUISITION:  On April 5,  1999,  the  Company  announced  that it had agreed to
acquire KnowledgeBase Marketing, Inc., a leading customer relationship marketing
service that  specializes in gathering and analyzing  marketing data, in a stock
and cash transaction valued at approximately  $175 million.  The Company expects
to issue  approximately  2.1 million shares of common stock and to grant options
to  purchase   approximately  600,000  additional  shares  of  common  stock  in
connection  with this  transaction.  The transaction is expected to close in the
second quarter of 1999.

CASH  DIVIDEND:  On April 29,  1999,  the  Company  announced  that the Board of
Directors  declared a cash dividend of $0.025 per common share,  payable on June
15, 1999 to all stockholders of record as of June 1, 1999.


                                       6

<PAGE>



ITEM 2: MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
   
     The following  discussion  should be read in  conjunction  with our audited
consolidated  financial  statements and notes thereto, and the information under
the caption  "Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations," contained in our Annual Report on Form 10-K for the year
ended December 31, 1998 as filed with the Securities and Exchange Commission.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods  indicated,  selected items
derived from our  consolidated  statements of operations and the  percentages of
revenue represented by these items.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
                                                         Three Months Ended March 31,
                                                                % of               % of
(in millions)                                        1999    Revenues   1998      Revenues
-----------------------------------------------------------------------------------------
<S>                                                 <C>        <C>      <C>        <C>   
Revenues                                            $ 383.9    100.0%   $ 348.2    100.0%
Compensation expense, including employee benefits     235.0     61.2%     213.6     61.3%
General and administrative expenses                   114.3     29.8%     109.2     31.4%
-----------------------------------------------------------------------------------------
Income from operations                                 34.6      9.0%      25.3      7.3%
Net income                                           $ 19.7      5.1%   $  12.2      3.5%
=========================================================================================
* Totals may not add due to rounding.
</TABLE>


                                       7

<PAGE>


FIRST QUARTER 1999 COMPARED TO FIRST QUARTER 1998

          Revenues for the first quarter of 1999 increased by $35.7 million,  or
10.3%, to $383.9 million compared to the first quarter of 1998. The increase was
primarily  due to net new  business,  including  business  from new  clients and
higher revenue from existing  clients,  that we generated from clients including
Ford and AT&T.  United States revenues  increased by 13.1% to $208.6 million for
the first quarter of 1999  compared to the first quarter of 1998.  International
revenues  increased  by  7.1%  to  $175.3  million,   primarily  due  to  strong
performance in Europe,  which was partially  offset by declines in Latin America
and the Asia/Pacific  region and the impact of the overall  strengthening of the
U.S.  dollar against  foreign  currencies.  Organic  worldwide  revenue  growth,
excluding the effect of acquisitions and foreign currency fluctuations, was also
10.3%,  with the impact of the  strengthening of the U.S. dollar against foreign
currencies offset by revenues from acquisitions. Excluding the effect of foreign
currency  fluctuations and acquisitions,  international  revenues increased 7.8%
for the first quarter of 1999 compared to the first quarter of 1998.

     Compensation  expense  increased by $21.4 million to $235.0 million for the
first quarter of 1999  compared to the first  quarter of 1998.  This increase in
compensation  expense  was  primarily  due to salary  increases  and  additional
staffing  to support  new  business  growth.  Compensation  expense in the first
quarter of 1999 decreased as a percentage of revenues to 61.2% from 61.3% in the
first quarter of 1998.

     General and  administrative  expenses  increased  by $5.1 million to $114.3
million for the first  quarter of 1999  compared  to the first  quarter of 1998.
This increase was primarily due to additional  operating expenses to support new
business  growth,  offset  in part by the  impact of cost  containment  measures
implemented  by  management.  General and  administrative  expenses in the first
quarter of 1999 decreased as a percentage of revenues to 29.8% from 31.4% in the
first quarter of 1998.

     Income  from  operations  increased  by $9.3  million,  or 36.8%,  to $34.6
million for the first  quarter of 1999  compared  to the first  quarter of 1998.
This increase was  primarily due to net new business  gains in 1999 and improved
operating margins.

     Net  interest  expense  decreased  by $3.9  million to $1.6 million for the
first quarter of 1999 compared to the first quarter of 1998. The decline was due
to lower average  borrowing levels and lower average  borrowing rates during the
first quarter of 1999 compared to the first quarter of 1998.

     We recognized  income tax expense of $13.5 million for the first quarter of
1999 compared to $8.9 million for the first  quarter of 1998.  The effective tax
rate for the first quarter of 1999 was 41.0%,  as compared to 43.0% in the first
quarter of 1998. The decrease in the effective tax rate was due to a decrease in
foreign  income  taxed at rates  greater than the U.S  statutory  rate and lower
taxes on U.S. income.

     Net income for the first quarter of 1999 was $19.7 million  compared to net
income of $12.2  million for 1998.  This  increase was  primarily  the result of
revenue  growth,  improved  operating  margins,  lower net borrowing costs and a
reduced effective tax rate.

LIQUIDITY AND CAPITAL RESOURCES

     We   generally   finance  our  working   capital,   capital   expenditures,
acquisitions  and equity  repurchases  from cash generated  from  operations and
third-party borrowings.

     Cash and cash  equivalents  were $63.2 million and $122.1  million at March
31, 1999 and December 31, 1998.  Cash used in operating  activities in the first
quarter  of 1999 was  $124.5  million  compared  to $122.2  million in the first
quarter of 1998.  Quarterly  operating cash flows are significantly  impacted by
the seasonal media  spending  patterns of  advertisers,  including the timing of
payments made to media and


                                        8

<PAGE>



other  suppliers on behalf of clients as well as the timing of cash  collections
from  clients to fund these  expenditures.  Our  practice is to bill and collect
from our clients in sufficient time to pay the amounts due the media.

     Cash used in investing  activities  in the first  quarter of 1999 was $25.0
million and included $14.8 million in capital expenditures and $10.2 million for
net acquisitions, investments and other investing activity. In the first quarter
of  1998,  cash  used in  investing  activities  was $8.6  million,  principally
consisting  of $7.9  million in capital  expenditures.  The  majority of capital
expenditures   in   the   first   quarter   of   1999   were   for   information
technology-related   purchases   and  leasehold   improvements.   These  capital
expenditures are estimated to be approximately  $65 million for the remainder of
1999.  Acquisitions  and  investments  in the first  quarter  of 1999  consisted
primarily of the purchase of a company located in the United States specializing
in grassroots issues management.

     Cash  provided by  financing  activities  in the first  quarter of 1999 was
$90.4  million and  included  net  borrowings  of $131.8  million.  In the first
quarter of 1999, we  repurchased  1.1 million shares of common stock on the open
market and in other transactions for an aggregate of $42.4 million.  As of March
31, 1999, we had  repurchased  a total of 3.0 million  shares under the existing
8.0 million share  repurchase  program.  As of May 12, 1999, we had  repurchased
approximately  0.2 million  additional  shares for an  aggregate of $8.3 million
under the share repurchase program during the second quarter of 1999.

     In the first  quarter of 1998,  cash provided by financing  activities  was
$22.7  million,  reflecting  borrowings  under our short  and  long-term  credit
facilities  that  existed  at that  time  to fund  our  operations  and  capital
expenditures.

     At March  31,  1999,  we had  approximately  $151  million  in  outstanding
indebtedness under our $400 million credit facility.  We expect to fund payments
of principal and interest under this credit facility with cash from  operations.
We intend to increase our borrowing capacity by entering into an additional $200
million  credit  facility  during the second  quarter of 1999.  During the first
quarter of 1999, all interest rate protection  agreements to which we were party
either matured or were retired.  Accordingly,  at March 31, 1999, we had no such
agreements outstanding.

     At March  31,  1999,  our net  deferred  tax  assets  were  $197.1  million
consisting   primarily  of  federal,   state  and  foreign  net  operating  loss
carryforwards  and deferred tax assets resulting from prior period  compensation
payments made in connection  with our initial public offering of common stock in
1998 and our recapitalization in 1996.

     Our  $400  million  credit  facility   contains   financial  and  operating
restrictions  and  covenant  requirements,  and  permits  the  payment  of  cash
dividends  except  in  the  event  of a  continuing  default  under  the  credit
agreement.  On April 29, 1999, we announced that our board of directors declared
a cash  dividend  of $0.025 per common  share,  payable on June 15,  1999 to all
stockholders of record as of June 1, 1999. Any  determination  to pay additional
dividends in the future will be at the  discretion of our board of directors and
will depend upon,  among other  factors,  our results of  operations,  financial
condition,  capital  requirements  and  contractual  restrictions  in our credit
facilities.

     On April 5, 1999, we announced that we had agreed to acquire  KnowledgeBase
Marketing,   Inc.,  a  leading  customer  relationship  marketing  service  that
specializes  in gathering  and  analyzing  marketing  data,  in a stock and cash
transaction   valued  at  approximately   $175  million.   We  expect  to  issue
approximately  2.1 million  shares of common stock and grant options to purchase
approximately  600,000  additional shares of


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common stock in connection with the transaction.  The transaction is expected to
close in the second quarter of 1999.

     We may,  from time to time,  pursue  acquisition  opportunities  that would
expand or enhance  existing  capabilities or expand the geographic  scope of our
operations.

     We believe that cash provided by operations and funds  available  under our
credit  facilities will be sufficient to meet our anticipated cash  requirements
as presently contemplated.

YEAR 2000 COMPLIANCE

     We are  working to  resolve  the  potential  impact of the year 2000 on the
ability of our computer  systems to accurately  process  information  with dates
later  than  December  31,  1999,  or  to  process  date-sensitive   information
accurately after the turn of the century (referred to as the "Year 2000" issue).
We have modified or replaced the majority of all affected systems and are in the
process  of  testing  these  systems  to  fully  validate  their  readiness  for
compliance  with  the  Year  2000  issue.  We are  also  dependent  in  part  on
third-party computer systems and applications, particularly with respect to such
critical tasks as accounting, billing and buying, planning and paying for media,
as well as on our own computer systems. We have performed tests of major systems
in this  category  and  have  received  assurances  as to  their  readiness  for
compliance  with the Year 2000  issue.  However,  we  continue  to  monitor  the
adequacy of the processes and progress of other less critical vendors of systems
and  applications  that may be  affected  by the  Year  2000  issue  and to seek
assurances from these vendors that their systems are Year 2000 compliant.

     While we believe our process is designed to be  successful,  because of the
complexity of the Year 2000 issue and the interdependence of organizations using
computer  systems,  it is possible  that our efforts,  or those of third parties
with whom we interact, will not be satisfactorily completed in a timely fashion.
Our failure to satisfactorily  address the Year 2000 issue could have a material
adverse effect on our prospects,  business,  financial  condition and results of
operations.

     We do not expect the costs of our Year 2000 project to be material,  and we
have funded all  identified  remedial  projects in connection  with our program.
However,  we may  experience  cost  overruns  or delays as we  replace or modify
systems, which could have a material adverse effect on our prospects,  business,
financial condition and results of operations.

     We are presently  evaluating the extent of contingency planning that may be
required.

IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS

    In June 1998, the Financial  Accounting Standards Board issued Statement No.
133, "Accounting for Derivative  Instruments and Hedging  Activities",  which is
required  to be  adopted  in years  beginning  after  June 15,  1999.  We do not
anticipate that the adoption of this statement will have a significant effect on
our financial condition.


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PART II: OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits: See Exhibit Index

     (b)  Reports on Form 8-K: None.



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                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                               Young & Rubicam Inc.
                                               --------------------
                                                   (Registrant)

Date:  May 17, 1999                             
     ----------------                            

                                          /s/ John A. Wozniak
                                         ------------------------------------
                                   Name:   John A. Wozniak
                                   Title:  Senior Vice President, Controller

                                             Principal Accounting Officer



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<PAGE>



                                 EXHIBIT INDEX

NUMBER              DESCRIPTION
------              -----------

27.1                Financial Data Schedule





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